A 2010 report by the U.S. Department of Energy said New Jersey can generate 373 gigawatt hours of wind energy. The data ‘expands the economic viability of wind beyond what was thought in (the state),’ says Rick Dovey, director of the ACUA, which runs the wind farm in Atlantic City, above. However, in the years since, New Jersey has not capitalized upon that potential.

In 2009, Delsea Energy proposed an ambitious and controversial plan to raise more than 100 wind turbines in the Delaware Bay. The State Department of Environmental Protection now says offshore wind farms can be built without harming wildlife.

Siemens

New Jersey left behind on offshore wind energy

A 2010 report by the U.S. Department of Energy said New Jersey can generate 373 gigawatt hours of wind energy. The data ‘expands the economic viability of wind beyond what was thought in (the state),’ says Rick Dovey, director of the ACUA, which runs the wind farm in Atlantic City, above. However, in the years since, New Jersey has not capitalized upon that potential.

In 2009, Delsea Energy proposed an ambitious and controversial plan to raise more than 100 wind turbines in the Delaware Bay. The State Department of Environmental Protection now says offshore wind farms can be built without harming wildlife.

Siemens

New Jersey may have missed being a national leader in offshore wind energy as neighboring states move forward with their projects.

Despite Gov. Chris Christie’s signing of legislation in 2010 that would have positioned the state as a hub for the new industry — complete with a port on the Delaware River where windmill components would be developed — the state is no closer to its goal of generating 1,100 megawatts per year from wind farms off its coast.

Less than a week before the state Board of Public Utilities rejected a plan by Fishermen’s Energy to erect five turbines off Atlantic City, a court cleared the way for 130 turbines off Cape Cod that would produce as many as 420 megawatts. Maryland is seeking a 200-megawatt project off its coast.

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“Eventually, it’s going to happen,” said state Sen. Jim Whelan, D-Atlantic. “Unfortunately, the port for it will be in Virginia or Massachusetts, and the jobs will be out there instead of in New Jersey.”

Advocates blame the state’s flagging resolve — the energy market for the new industry has yet to be established — and the rise of inexpensive natural gas from fracking in neighboring states. Christie and state Senate President Stephen Sweeney have endorsed a high-volume pipeline through the Pinelands that would bring natural gas to Upper Township to power the B.L. England Generating Station.

The state’s other two major offshore wind proposals, by Bluewater Wind New Jersey Energy and Garden State Offshore Energy, languished in recent years. The BPU canceled the former company’s rebate in 2012 while granting a series of extensions to the latter. A spokeswoman for Deepwater Wind, one of the companies behind Garden State, declined to comment on that project’s status.

Meanwhile, the South Jersey Port Corp., which oversees the Paulsboro Marine Terminal, does not yet have any wind-related tenants for its proposed industrial park, Director Kevin Castagnola said.

“Offshore wind at one point was gaining momentum. It’s slowed down a little from what I’ve seen,” he said. “If we can create jobs, everyone is interested.”

Castagnola declined to comment on the BPU’s latest decision but said he’s optimistic the state can generate interest for offshore wind through its $100 million in tax incentives that Christie approved in 2010.

“It is a big carrot. $100 million is still $100 million. It’s the impetus to get things started,” he said.

But first the state has to decide what’s a reasonable price for New Jersey wind producers to charge for electricity.

“Without the rules, it’s hard for them to get the resources to make offshore wind a reality,” said Jeff Tittel, director of the New Jersey Sierra Club.

Tittel, like a number of advocates, said Christie’s political ambitions may have played a role in the lack of progress on wind energy.

“He was pro-wind when he was elected,” he said. “Since he became a national politician, all of the sudden nothing has happened on wind.”

Michael Drewniak, the governor’s spokesman, said his office awaits the BPU’s final order on the Fishermen’s Energy proposal for a 25 megawatt wind farm to review its findings.

“There were complex public policy and financing issues involved with the application and, according to the BPU, the best interests of the public and ratepayers were not met,” he said in a written statement.

Gregory Reinert, the BPU’s director of communications, said the board raised concerns about the Atlantic City project’s economic net benefits and financial integrity. He declined further comment but said the board’s order is expected next week.

That document should detail how the board reached its decision and will start the clock for an appeal.

Fishermen’s Energy has vowed to appeal. The Cape May firm says the proposed price for electricity was $199.17 per megawatt hour versus the BPU's cited price of $263 per megawatt hour.

“We’re still in the fight,” Chief Operating Officer Paul Gallagher said Friday. “We’re waiting for a copy of the BPU order. We have meetings with partners and investors. We’ve proven our case on the merits.”

Gallagher, of Linwood, faulted the BPU for a bureaucratic review that is in its third year.

“It’s supposed to be a 180-day process, and they rejected it on the 1,035th day,” he said. “They could have said no a year and a half ago, and we’d have already been through the appeal.”

The company focused on state waters because state regulations were expected to be an easier path to approval than a project in federal waters that would have to go through the newly formed U.S. Bureau of Ocean Energy Management, Gallagher said. It intends to build the demonstration project as a precursor to a much larger and more ambitious commercial project in federal waters.

“I think we guessed right,” Gallagher said. “There still haven’t been any (federal) leases approved in New Jersey for offshore wind.”

By contrast, Fishermen’s Energy received all the state construction permits it needed to proceed. The last hurdle was a power-purchase agreement that established the financial market for New Jersey’s nascent offshore wind industry, Gallagher said.

“We have a fully permitted project we can build tomorrow. We just can’t access the (energy) market,” he said.

The project would be supported through Offshore Renewable Energy Credits, a subsidy nearly identical to the type that kick-started New Jersey’s solar industry. It’s an artificial market created to further the state’s goal of generating more renewable energy, which typically costs more than cheaper but environmentally harmful sources of energy such as coal, oil or natural gas.

This market would guarantee buyers for the more expensive wind energy created by Fishermen’s Energy’s Atlantic City turbines. Gallagher said the state was in a prime position several years ago but hasn’t kept up with neighboring states.

Not including proposed offshore wind projects, New Jersey has added just one megawatt of wind power capacity since 2010, according to data gathered by the American Wind Energy Association. During the same period, Massachusetts and Pennsylvania nearly quintupled and doubled their capacities, while Maryland and New York grew by 71 percent and 35 percent, respectively.

Whelan said wind energy offered New Jersey the opportunity to bring jobs to the region — Fishermen’s Energy alone estimated more than 400 new jobs would be created — and to generate cleaner energy.

The region faces the loss of at least two power plants in the years ahead. If B.L. England doesn’t convert from coal to natural gas, it could close by 2016. Lacey Township’s Oyster Creek Generating Station will go offline three years later.

“The energy has to come from somewhere,” Whelan said.

While the pipeline would help prolong the life of B.L. England, he said, natural gas is not an ideal solution as it will continue to pollute the environment. Unfortunately, he added, the current outlook for wind energy isn’t optimistic.

“It’s frustrating and disappointing,” he said. “We spent a lot of time and energy and dollars committing to do this.”

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